Rating: Hold
Current Market Price: N1.0

Latest Dividend: N0.05
Year High: N1.35
Year Low: N0.90
Fair Value: N1.00
Equity Analyst:  Tunde Segun Jeariogbe

Key Investment Ratios

• In this report, the first quarter numbers of Learn Africa Plc for the period ended 30^th June, 2020 was observed, and compared with similar numbers in 2019 to establish growth. We have explored the full year numbers while projecting for valuation purposes.
• Please understand that the company changed its financial year end from 31^st December to 31^st March, hence, the 2018 full year numbers were not available, and instead, it presented an audited 15-month score-card, as against 12 months in the corresponding year.
• In other words, the half-year 2020 numbers were concluded at the end of September and should be released before the end of October, 2020.
• According to the report, the company ended the quarter with zero long-term liabilities, a status it had carried over the years.
• Note that the latest first-quarter score-card is outstanding, when compared against the corresponding quarter’s loss position.
• See below for other financial numbers/ratios.

LEARN AFRICA (LONGMAN)
Bourse	Nigerian Stock Exchange
Code Name	LEARNAFRCA
Sector	SERVICES
Market Classification	MAIN BOARD
Nature of Business	Publishing, Distributing and Marketing of high Quality Educational, Professional, Reference and General Books
Date of Incorporation	October 8th 1961
Date Listed
End of Accounting Year	31ST MARCH
Website	www.learnafricaplc.com
Registrar	First Registrars & Investor Services Limited
Auditor	ERNST & YOUNG
Share Price@Relsd (N)	1.07
Earnings per Share	0.02
Intrinsic Value(N)	0.81
Share Outstanding	771,450,000
Market Capitalisation	825,451,500

Company figures

• At the end of the quarter, the management of Learn Africa Plc grew its Turnover by 22.89% to N207.16 million over the corresponding quarter’s N168.57 million.
• Cost of Sales, on the other hand, dropped by 19.08% to N87.82 million from the previous N108.53 million, which is commendable.
• Operating Profit is currently estimated at N25.61 million, compared to the Loss of N191.95 million reported at the end of 2019 first quarter business session.
• Operating Expenses was highly curtailed to N93.72 million, as against N252.59 million in the comparable quarter.
• Through the two quarters compared in this report, the management of Learn Africa reported a zero finance cost as shown in the table below.
• Thus, it achieved a Profit before Tax of N25.61 million, as against the Loss after Tax of N188.66 million in the similar quarter of 2019.
• Following the Tax Expenses, the company reported a Profit of N17.93 million for the period, versus Loss after Tax of N188.65 million in the corresponding quarter.

LEARN AFRICA (LONGMAN)
Statement of Comprehensive Income
	2020(000)	2019(000)	%CHG
Turnover	207,166	168,578	22.89
Cost of Sales	87,829	108,536	-19.08
Operating Profit	25,611	(191,955)	-113.34
OPEX	93,726	252,598	-62.90
DEPRECIATION	5,564	12,811	-56.57
FINANCE COST	–	–	#DIV/0!
NET FINANCE INCOME	4	3,290	-99.88
PBT	25,615	(188,665)	-113.58
TAX	7,685	–	#DIV/0!
PAT	17,931	(188,655)	-109.50
TOTAL COMP INCOME	17,931	(188,655)	-109.50
Statement of Financial Position
Current Assets	4,074,546	3,799,867	7.23
Non Current Assets	1,207,470	1,213,374	-0.49
Total Assets	5,282,016	5,013,241	5.36
Current Liabilities	2,150,136	1,906,976	12.75
Non Current Liabilities	–	–	#DIV/0!
Total Liabilities	2,150,136	1,906,976	12.75
Net Assets	3,131,880	3,106,265	0.82
Retained Earnings	738,238	712,623	3.59
Shares Outstanding	771,450,000	771,450,000

• Current Asset was valued at N4.07 billion, as against N3.79 billion at the end of 2019 first quarter business session. The positive difference between the two valuation is same as 7.23%
• Non-Current Assets on the other hand is valued at N1.20 billion, representing 0.49% downward adjustments from the N1.21 billion valuation at the end of 2019 first quarter.
• Meanwhile, Current Liabilities improved by 12.75% to N2.15 billion, as against the previously reported N1.90 billion in the 2019 first quarter result.
• As noted above, the company ended the first three months of its 2020 financial year with zero long-term liabilities.
• Net Assets is therefore estimated at N3.13 billion, same as 0.82% above the previous value of N3.10 billion in the corresponding period.
• Also, Retained Earnings improved by a marginal 3.59% to N738.23 million versus the N712.62 million in 2019.

Financial Strength/Solvency Ratios

• Debt Ratio is currently estimated at 40.71%, same as 7.01% above the 38.04% estimated in the similar period of 2019. This implies that, Total Liabilities is same as 40.71% of Total Assets.
• Total Debt to Equity ratio was estimated at 68.65%, as against the 61.39% estimated in the comparable quarter.
• It was established that Equity is same as 59.29% of Learn Africa Assets Value, this is a marginal drop when compared to the 61.69% achieved in similar period of 2019.
• Going by the far-below unity beta value (0.36), we can safely conclude that shares of Learn Africa are relatively not liquid.

Financial Strength/Solvency Ratio
TICKERS	2020	2019	%CHG
Debt Ratio	40.71%	38.04%	7.01
Total Debt to Equity Ratio (MRQ)	68.65%	61.39%	11.83
Equity Ratio	59.29%	61.96%	-4.31
TICKERS	2020	Industrial Average	%CHG
Beta Value	0.36	0.52	-30.77

Profitability Ratios

• Profit before Tax Margin stood at 12.36%, as against the negative ratio of the corresponding period of last year.
• Effective Tax Rate could not be measured appropriately due to the zero Tax Expense of the corresponding quarter.
• Cost of Sales was 42.40% of the Turnover figure this is 34.15% below the 64.38% estimated in 2019. This is a confirmation of the management’s effort at controlling its direct cost.
• Return on Equity stood at marginal 0.57%, compared to the negative estimate of the corresponding quarter.
• See the table below for details:

PROFITABILITY RATIOS
TICKERS	2020	2019	%CHG
EBITDA MARGIN	12.36%	-113.87%	-110.86
PRE-TAX MARGIN	12.36%	-111.92%	-111.05
EFFECTIVE TAX RATE	42.86%	0.00%	#DIV/0!
CS TO TO	42.40%	64.38%	-34.15
ROE	0.57%	-6.07%	-109.43
ROA	0.34%	-3.76%	-109.02

Efficiency Ratios

• Operating Expenses to Turnover value is same as 45.24%, representing a 69.81% improvement in efficiency, as against the 149.84% estimated in the 2019Q1 financial indices.
• Turnover to Total Assets Ratios stood at 3.92%, as against the 3.36% estimated in the comparable quarter. Understand that this is a low efficiency score for the management of Learn Africa Plc in the two quarters compared.
• Working Capital Ratio, which indicates a company’s effectiveness in using its working capital was estimated at 1.90x as against the 1.99x estimated in similar period of 2019.
• See below for details:

EFFICIENCY RATIOS
	2020	2019	%Chg
OPEX TO TO	45.24%	149.84%	-69.81
TO TO TA	3.92%	3.36%	16.64
Working Capital Turnover	0.11	0.09	20.88
Working Capital Ratio	1.90	1.99	-4.90

Investment/Valuation Ratios

• At the end of the quarter, the management recorded N0.02 on every unit of Learn Africa’s shares listed on the floor of the exchange, up from the negative earnings of the corresponding quarter.
• The price of Learn Africa’s shares as at the time this report was made available to the investing public was found to have replicated EPS 46.03x, which is quite on the high side, and may impact the company’s valuation.
• The said earnings per share is a 2.17% yield of the current market price of Learn Africa shares on the day it was released to investors.
• Book Value per share shows an under-valued position at N4.06, compared to the previous N4.03 estimate. Please note that this is far above our estimated fair value of the company’s shares.
•  Further confirming this position is the Price to Book value which stood below unity in the current period, as against below unity estimated in the corresponding quarter.

Investment/Valuation Ratios
Tickers	2020	2019	%Chg
Price at Released	1.07	1.32	-18.94
EPS	0.02	-0.24	-109.50
TCIP/SHARE	0.02	-0.24	-109.50
P/E-Ratio	46.03	-5.40	-952.85
Earnings Yield	2.17%	-18.53%	-111.73
BV/Share	4.06	4.03	0.82
PBV	0.26	0.33	-19.60

Valuation

While placing a fair value on each unit of Learn Africa’s share price, several things were put into consideration, including its consistency in dividend, and the varied growth performance. Thus, we have conservatively valued each unit of Learn Africa Plc at N1.00, considering the fact that it is growing performances indices. We have Rated it a Hold.